The State Of Bihar vs D. N. Ganguly and Others

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: Supreme Court of India

Case Number: Civil Appeals Nos. 358 and 359 of 1957

Decision Date: 22 August 1958

Coram: P.B. Gajendragadkar, A.K. Sarkar

The State of Bihar versus D N Ganguly and others was decided on 22 August 1958 by the Supreme Court of India. The judgment was authored by Justice P B Gajendragadkar, with Justice A K Sarkar and Justice T L Venkatarama Sarkar sitting on the bench. The case is reported in 1958 AIR 1018 and 1959 SCR 1191. The dispute concerned the interpretation of the Industrial Disputes Act, 1947, specifically section 10(1), and the power of the appropriate Government to supersede a reference to an industrial tribunal that was already pending. The Court examined whether section 21 of the General Clauses Act, 1897, could by necessary implication grant such a power. It reiterated that the rule of construction in section 21 applies only when the subject-matter, context and effect of the provisions are not inconsistent with such an application, and therefore it could not be read into section 10(1) of the Industrial Disputes Act. The Court cited several authorities: Minerva Mills Ltd v Their Workmen (1954 SCR 465) was held inapplicable; Strawboard Manufacturing Co Ltd v Gutta Mill Workers’ Union (1953 SCR 439) explained the principle; The Textile Workers’ Union, Amritsar v State of Punjab (1957 AIR 255) and Hayendranath Bose v Second Industrial Tribunal (1958 2 LLJ 198) were overruled; and South Indian Estate Labour Relations Organisation v State of Madras (1955 AIR Mad 45) was distinguished. In the factual backdrop, the Government issued two successive notifications referring two industrial disputes, involving distinct batches of workmen and their employer, to the appropriate tribunal. A later third notification attempted to supersede the earlier two. The Patna High Court, on applications under Articles 226 and 227 of the Constitution, quashed the superseding notification by a writ of certiorari and issued a writ of mandamus directing the tribunal to proceed with the original references. The State Government appealed. The Supreme Court held that the third notification was invalid and ultra vires, confirming the High Court’s decision. It further ruled that a reference under section 10(1) is an administrative act, making mandamus the appropriate writ rather than certiorari, and referred to State of Madras v C P Sarathy (1953 SCR 334). The matter was heard as Civil Appeals Nos 358 and 359 of 1957, appeals by special leave from the Patna High Court judgment dated 4 April 1956.

The Patna High Court had earlier issued decisions in M. J. C. Nos. 546 and 590 of 1955. Counsel for the appellant appeared in both appeals, while counsel for respondents numbered 1-10 and 12-57 represented those parties in Civil Appeal No. 358/57. The Attorney-General of India, together with counsel for respondent No. 59 in the same appeal and respondent No. 1 in Civil Appeal No. 359/57, also appeared. Additional counsel represented respondent No. 63 in Civil Appeal No. 359/57. The judgment was delivered on 22 August 1958 by Justice Gajendragadkar. The Court was called upon to consider whether a government, having referred an industrial dispute to a tribunal under section 10(1)(d) of the Industrial Disputes Act, 1947, could later supersede that reference while the tribunal was still hearing the matter. This question formed the core of the two appeals filed by special leave. The factual backdrop began on 8 October 1954 when the Government of Bihar issued Notification No. III/DI-1602/54-L-15225, invoking powers under sections 7 and 10(1) of the Act to refer a dispute between the management of Bata Shoe Co. Ltd., Digbaghat (Patna), and thirty-one workmen listed in Annexure IA. The dispute concerned the legality of the workmen’s dismissals and, if the dismissals were unlawful, whether reinstatement or other relief was appropriate. For adjudication, an industrial tribunal consisting solely of Mr Ali Hassan was constituted; this became reference No. 10 of 1954. Subsequently, on 15 January 1955, the Government issued Notification No. III/DI-1601/55-L-696, referring a second, similar dispute involving the same employer and twenty-nine additional workmen to the same tribunal, creating reference No. 1 of 1955. The tribunal consolidated the two references and proceeded with the hearings. However, on 17 September 1955 the Government issued a third notification, numbered III/DI-1601/55-L-13028, claiming authority to supersede the earlier two notifications. By this act the Government sought to merge the two disputes into a single case, to join both groups of workmen together, to add the Bata Mazdoor Union as a party, and to refer the combined matter back to the same sole-member tribunal. The newly framed dispute asked whether the dismissals of all sixty workmen listed in Annexure B were justified or unjustified and what relief, if any, they were entitled to. Upon receiving this third notification, the tribunal issued an order on 19 September 1955 canceling the scheduled hearing of the two earlier references that had been set for 3 October 1955 and directing that the files of those references be closed. The Bata Company promptly responded to these developments.

Following the issuance of the last notification, the Bata Company and its workmen each filed separate petitions in the Patna High Court invoking articles 226 and 227 of the Constitution. Both petitions sought the setting aside of the September 17, 1955 notification on the ground that it was illegal and ultra vires. The two petitions were recorded as M.J.C. Nos. 546 and 590 of 1955. On 4 April 1956 the Patna High Court concluded that the Government of Bihar possessed no power or authority to supersede the earlier notifications. Consequently, the Court allowed both petitions, issued a writ of certiorai nullifying the impugned September 17 notification, and also issued a writ of mandamus directing the industrial tribunal to expedite reference-cases No. 10 of 1954 and No. 1 of 1955 and to bring those matters to a lawful conclusion. The Government of Bihar challenged this judgment and, on 26 June 1956, obtained leave to appeal before the Supreme Court. Thus, the present appeals before the Supreme Court arose. In both appeals the appellant was the State of Bihar, while the respondents were respectively the Bata Company and its workmen. On the appellant’s behalf, it was submitted that the Patna High Court erred in holding that the State lacked the power to set aside the earlier notifications and to refer the dispute to the industrial tribunal pursuant to section 10(1) of the relevant Act.

To understand the context of the challenged notification, the Court set out several material facts. After the end of the Second World War, the workmen employed at the Bata Company’s Digha factory formed a trade union. The union elected Mr John as its president and Mr Fateh Narain Singh as its general secretary. On 22 June 1947 the company entered into a collective agreement with this union, and by mutual consent the standing orders and rules, certified under the Industrial Employment (Standing Orders) Act, 1946, were finalized. The union was recognised as the sole and exclusive collective bargaining agent for the company’s workmen. Towards the close of 1954 the union fractured into two factions, creating rivalry between a group led by Mr Fateh Narain Singh and another led by Mr Bari. On 22 January 1954 the union, through its general secretary Mr Fateh Narain Singh, served the company with a “slow-down notice” to take effect from 24 February 1954. Subsequently, on 6 February 1954, Mr Bari, claiming to act as the union president, urged his supporters to commence a strike from 23 February 1954. The demands articulated by Mr Fateh Narain Singh gave rise to conciliation proceedings under the Act, which culminated in a settlement recorded on 8 February 1954. Notwithstanding this settlement, a number of workmen, including the sixty workmen under scrutiny who were supporters of Mr Bari, proceeded to engage in an illegal strike.

In February 1954 the workmen who supported Mr Bari struck on the 23rd, even though, as union members, they were bound by the settlement already recorded. The majority of the workforce opposed this illegal action; on 16 February 1954 a letter signed by five hundred workmen who had withdrawn from the strike was sent to the company. That letter requested that the company arrange suitable conditions so those workers could resume their duties. The strike achieved only limited success because, out of a total of eight hundred fifty-four employees employed at the Digha factory, nearly five hundred reported for work despite threats issued by the striking group. The appellant consequently declared the strike illegal under section 23(c) of the Industrial Disputes Act. Following the declaration, the company served charge-sheets to the strikers and ultimately dismissed two hundred seventy-four workmen, including the sixty workmen who were the subject of the present dispute.

After the dismissals the union entered into negotiations with the management. During those talks the parties agreed that one hundred ten of the strikers would be reinstated in the same manner as seventy-six strikers who had already been taken back on. The parties further agreed that thirty strikers would remain dismissed and would not be eligible for reemployment or any benefits, while the remaining thirty would have their individual cases considered at a later date. Throughout these negotiations the sixty workmen in question neither lodged any individual or collective demand for reinstatement nor had their situation raised by any other organization or body of workmen. Consequently, as far as the union was concerned the dispute concerning the entire group of dismissed strikers was settled by the negotiated agreement.

Notwithstanding the settlement, the conciliation officer, Mr Sinha, wrote to the company on 3 September 1954 expressing his desire to commence conciliation proceedings concerning some of the dismissed employees. The dispute raised by the sixty workmen, however, was not sponsored by any organization or collective body. On 22 September 1954 the union secretary wrote to the Commissioner of Labour objecting strongly to the proposed referral of the sixty workmen’s alleged dispute to adjudication. In view of these developments the appellant issued its first two notifications on 8 October 1954 and on 15 January 1955.

On 30 May 1955 the union filed an application before the industrial tribunal claiming that a majority of the workmen were opposed to the reinstatement of the sixty workmen and therefore the union had a material interest in the proceedings. Two additional applications were filed by other workmen seeking to be joined to the case on the ground that they likewise opposed the reinstatement of the workers whose cases were pending before the tribunal. The tribunal rejected all of these applications. Subsequent to the rejections, Mr Fateh Narain Singh approached the Department of Labour of the Government of Bihar, and it was apparently…

According to the representation made by Mr. Fateh Narain Singh, the appellant issued a third notification that superseded the earlier two notifications and referred the entire dispute anew to the industrial tribunal, with Mr. Singh’s union added as a party to the proceedings. That description summarizes the origin of the notification that is being challenged in the present matter. Counsel for the appellant, Dr. Bannerjee, submitted that when considering the powers of the appropriate government under section 10(1) of the Act, the Court must keep in view the circumstances that led to the cancellation of the first two notifications and the subsequent issuance of the third, now-impugned, notification. He argued that the issuance of the third notification was performed in good faith and solely for the purpose of ensuring fairness and justice. He further asserted that the appellant concluded that it was necessary for the union to be heard before the Industrial Tribunal adjudicated the disputes, and that it would be more convenient and conducive to industrial peace and harmony if the dispute were referred to the tribunal in a more comprehensive and consolidated manner, thereby presenting before the tribunal all parties who had an interest in the matter. In the Court’s view, the good-faith motive that Dr. Bannerjee relies upon is not relevant to the question of the appellant’s powers under section 10(1) of the Act. If the appellant possessed authority to cancel a notification issued under section 10(1), and if the validity of such a cancellation were challenged on the ground of bad faith, then the appellant’s motives could be examined as material. However, if the appellant lacks any authority to cancel or revoke a notification made under section 10(1), then the appellant’s alleged good faith cannot legitimize the contested cancellation. Accordingly, the Court holds that the appellant cannot base its arguments on its purported good-faith conduct. Dr. Bannerjee concedes that the Act does not expressly grant the appropriate government power to cancel or supersede a reference made under section 10(1) of the Act. Nevertheless, he contends that such power must be read as implied, and he relies on section 21 of the General Clauses Act, 1897 (X of 1897) to support this position. Section 21 states: “where, by any Central Act or Regulation, a power to issue notifications, orders, rules or bye-laws is conferred, then that power includes a power, exercisable in the like manner and subject to the like sanction and conditions (if any), to add to, amend, vary or rescind any notifications, orders, rules or byelaws so issued.” It is well settled that this provision embodies a rule of construction, and whether it applies to a particular statute depends on the subject-matter, context, and effect of the relevant provisions of that statute.

In order to determine whether the power to cancel a reference made under section 10(1) can be impliedly vested in the appropriate government, the Court said it was necessary to examine the statute with great care. This examination required a close look at the overall scheme of the Act, the purpose for which the legislation was enacted, and every provision that was material to the question. Only after such a detailed analysis could one decide whether the rule of construction set out in section 21 of the General Clauses Act was applicable to give effect to the appellant’s claim. The Court explained that if the context and the effect of the relevant provisions of the Act were found to be inconsistent with the application of that rule, the appellant would not be permitted to rely on section 21. Consequently, the Court proceeded to study the substantive provisions of the Act itself. The policy of the Act, as the Court noted, is to secure and preserve harmonious relations between employers and workmen and to maintain industrial peace. With that objective, section 3 creates Works Committees whose duty is to foster amity and good relations between the two sides. When a Works Committee cannot resolve a dispute, the Act provides for the assistance of conciliation officers and boards of conciliation, as detailed in sections 4, 5, 12 and 13, which together form the conciliation machinery contemplated by the legislation. It is only when this machinery fails to achieve settlement that the Act allows for compulsory adjudication of industrial disputes by labour courts or tribunals, which is intended as a last resort.

The Court then turned to the role of the appropriate government in the adjudication process. Under sections 7 and 7A, the appropriate government is empowered to constitute labour courts and tribunals, respectively. In relation to compulsory adjudication, section 10 grants the appropriate government a wide discretion to decide whether a dispute between an employer and his employees should be referred to a board, a court, or a tribunal. Specifically, section 10(1)(d) provides that when the government is of the opinion that an industrial dispute exists or is likely to arise, it may, by a written order, refer the dispute to a tribunal for adjudication. The Court emphasized that a prerequisite for such a reference is that the government must be satisfied, on a subjective basis, that an industrial dispute either exists or is apprehended. Not every allegation of a dispute will lead to a reference under section 10(1); only when the government’s satisfaction test is met can the reference be made. This requirement, the Court held, demonstrates that the appropriate government holds a significant role in permitting industrial disputes to proceed to adjudication through a tribunal. However, once the government issues a written order of reference, the subsequent proceedings are governed by the tribunal’s jurisdiction, and the government’s role changes accordingly.

When the appropriate government issued a written order that referred an industrial dispute to a tribunal for adjudication under section 10(1), the law deemed that the proceedings before the tribunal began on that date. Those proceedings were considered to have ended on the day when the award made by the tribunal became enforceable under section 17A. This effect was provided by section 20(3) of the Act. The provision showed that after the dispute was referred, the tribunal itself took charge of the matter and possessed the jurisdiction to deal with it while the reference proceedings continued. The appropriate government could intervene in a reference that was still pending adjudication only under section 140(5), which allowed it to add other parties to the dispute, subject to the conditions specified in that subsection. Consequently, except for the limited situations covered by section 10(5), the appropriate government remained outside the reference proceedings, which were under the exclusive control and jurisdiction of the tribunal. Even after an award was made, the appropriate government was obligated by section 17(1) to publish the award within thirty days of receiving it.

Section 17(2) provided that, subject to the provisions of section 17A, the award published under subsection 1 was final and could not be challenged in any court in any manner. Section 19(3) further stipulated that, subject to other provisions of section 19, an award would remain in operation for one year from the date it became enforceable under section 17A. Although sections 17A and 19 gave the appropriate government powers to modify the award or limit the period of its operation, a detailed discussion of those powers was unnecessary for the present analysis. The overall scheme of the provisions in Chapters III and IV of the Act therefore placed the reference proceedings exclusively within the jurisdiction of the tribunals created under the Act and made the tribunals’ awards binding on the parties, subject only to the special powers conferred on the appropriate government by sections 17A and 19. The appropriate government undeniably had the initiating role, because only when it made a written order referring a dispute to the tribunal could the reference proceedings commence. However, the scheme of the relevant provisions appeared, on its face, to be inconsistent with any authority of the appropriate government to cancel a reference made under section 10(1). The power claimed by the Happening to cancel such a reference seemed likewise inconsistent with other provisions of the Act, including the proviso to section 10, which required the appropriate government to refer a dispute relating to public utility service when a notice under section 22 had been given, unless the notice was frivolous, vexatious, or it would be inexpedient to refer the dispute.

In regard to a dispute concerning a public-utility service, the law required that a reference to an industrial tribunal could be made only after a notice under section 22 had been issued, and only if the appropriate government did not consider that such notice had been issued frivolously or vexatiously, or that making the reference would be inexpedient. The proviso, therefore, demonstrated that the normal expectation was for the government to refer a public-utility dispute to adjudication. Once the government made such a reference, it was difficult to understand how the same government could, while the reference was pending before the Industrial Tribunal, cancel the reference and replace its original order. Section 10, sub-section (2), dealt with situations in which the parties to an industrial dispute applied, either jointly or separately, to the appropriate government in the manner prescribed, seeking a reference of the dispute to the appropriate authority. The provision stipulated that if the government was satisfied that the applicants represented the majority of each party, it was obliged to make the reference accordingly. In other words, the only condition the government needed to verify was that the demand for reference arose from the majority of each side; once that condition was met, the government was under a duty to refer the dispute for industrial adjudication. It was therefore inconceivable that the government could later claim authority to cancel a reference that had been made under section 10(2). During the arguments, the learned counsel for the respondent even conceded that sustaining an implied power of cancellation with respect to a reference made under section 10(2) would be difficult. A further relevant consideration arose from section 12, which set out the duties of the conciliation officer. The officer was required to exert his best efforts to achieve a settlement between the parties. If settlement could not be achieved, the officer had to submit a report to the appropriate government under sub-section (4) of section 12. The report had to contain a full statement of the material facts and circumstances, together with the reasons, in the officer’s opinion, for the failure to obtain settlement. Sub-section (5) then provided that, upon considering the report, if the government was satisfied that a case existed for reference to a board, labour court, tribunal or national tribunal, it might make such a reference. Conversely, if the government decided not to make a reference, it was required to record its reasons and communicate those reasons to the parties concerned. This provision imposed on the government an explicit obligation to document and convey the rationale for declining a reference after receiving the conciliation officer’s report, thereby indicating that when the officer’s efforts to settle a dispute failed, the government’s next step, upon receipt of the report, was to decide whether to refer the matter for adjudication and to explain that decision to the parties.

The judgment observed that when the appropriate government receives the conciliation officer’s report, it ordinarily refers the dispute for adjudication; however, if the government is not satisfied that a reference should be made, it must communicate its reasons for that decision to the parties concerned. The appellant argued that, if accepted, the government could thereafter cancel an order made under section 10(1) without providing any reasons. The Court held that such a view conflicted with the policy underlying section 12(5) of the Act and noted that, had the legislature intended to grant the appropriate government power to rescind a section 10(1) order, it would have enacted a specific provision to that effect and would have prescribed suitable limitations on the exercise of that power. The Court also examined the contention that, when a dispute referred to an industrial tribunal under section 10(1) is settled by the parties, the only way to give effect to the settlement is to cancel the reference and remove the proceedings from the tribunal’s jurisdiction. That contention rests on the assumption that the tribunal would be required to disregard the parties’ settlement and to render an award on the merits despite the settlement. The Court found this assumption unfounded. Although the Act contains no provision expressly authorising an industrial tribunal to record a compromise and to pass an award in terms corresponding to Order XXIII, rule 3 of the Code of Civil Procedure, it would be unreasonable to presume that a tribunal would insist on adjudicating the merits after being informed that the dispute has been amicably resolved. The Court reiterated that the primary objective of the Act is to promote amicable settlements of industrial disputes, which foster industrial peace and harmony. Settlements achieved before the conciliation officers or boards are dealt with under sections 12(2) and 13(3) and become binding under section 18. Consequently, if a dispute before a tribunal is settled amicably, the tribunal would be expected to make an award that reflects the settlement. Counsel cited numerous instances where industrial tribunals issued awards based on parties’ settlements. The Court further referred, incidentally, to section 7(2)(b) of the Industrial Disputes (Appellate Tribunal) Act, 1950 (XLVIII of 1950), which expressly provides for an award or decision of an industrial tribunal made with the consent of the parties. Although that Act is no longer in force, it had recognised such awards when it was operative.

The Court noted that when the legislature enacted provisions for appeals to the Appellate Tribunal under the Industrial Disputes (Appellate Tribunal) Act, it expressly recognised that industrial tribunals could make awards with the consent of the parties. Accordingly, the Court could not accept the contention that a reference to an industrial tribunal must be cancelled in order to give effect to an amicable settlement reached by the parties while the tribunal proceedings were still pending. In support of this view, the Court referred to other sections of the Act that impose restrictions on the parties during the pendency of reference proceedings. Section 10(3) authorises the appropriate government, by order, to prohibit the continuation of any strike or lock-out that is connected with a dispute which has already been referred to an industrial tribunal on the date of the reference. In the same vein, Section 33 provides that, during the pendency of the tribunal proceedings, an employer may not, with respect to any matter connected with the dispute, alter the conditions of service applicable to the workmen immediately before the commencement of the proceedings in a manner that prejudices them, nor may the employer dismiss or otherwise punish any workmen for misconduct connected with the dispute unless the authority before which the proceedings are pending gives express written permission. Failure to comply with the provisions of Section 33(1) is made punishable under Section 31 of the Act. These provisions demonstrate that, while the industrial tribunal is hearing the dispute, the parties are expected to maintain the status quo and to refrain from any action that might disturb industrial peace or prejudice a fair trial before the tribunal. If the power to cancel a reference under Section 10(1) were held to be implied, the tribunal proceedings could be terminated and superseded at any stage, thereby materially affecting the obligations and liabilities that the parties have incurred during the pendency of the proceedings. Because these provisions are intended to operate as a self-contained code governing the compulsory adjudication of industrial disputes, Section 15 commands the industrial tribunals to conduct their proceedings expeditiously and to submit their awards to the appropriate government as soon as practicable after the conclusion of the proceedings. Consequently, time is usually of essential importance in industrial adjudication, and the Act imposes an obligation on the tribunals to deal with their matters as swiftly as possible. If the appropriate government possessed an implied power to cancel its own order made under Section 10(1), the exercise of that power would render the tribunal proceedings wholly ineffective. Apart from the specific provisions of the Act, the Court observed that, on general principles, it is difficult to accept the argument that the appropriate government should have an implied power to cancel its own order made under Section 10(1).

In this case the Court considered the operation of section 10(1) of the Industrial Disputes Act. Under that provision the appropriate government, after receiving a representation made by an employer or by his workmen, is required to examine the matter fully, to determine that an industrial dispute either exists or is likely to arise, and thereafter to make a reference of the dispute to an industrial tribunal. The Court observed that once the appropriate government has exercised its power to make such a reference, there is no legal principle or rule that supports the contention that the same government retains an implied authority to cancel the order it has just issued and to bring the reference proceedings that it initiated to an end.

The Court stressed that the power the appellant claimed – the power to cancel an order made under section 10(1) – would be an absolute power if it were recognised. It clarified that this alleged power does not carry with it any accompanying duty to issue a fresh reference of the same dispute, nor is it subject to a condition that the government must set out reasons for the cancellation. Accordingly, if the appellant’s view were accepted, the appropriate government could at any stage terminate the proceedings before the tribunal and would be under no obligation to refer the industrial dispute to any other industrial tribunal at all. The discretion conferred by section 10(1) on the appropriate government to refer industrial disputes to tribunals is already very wide; by contrast, the power to cancel the order, as alleged by the appellant, would be even broader and was said to be implied from section 21 of the General Clauses Act. The Court held, without hesitation, that the rule of construction contained in section 21 – which governs the power to rescind or cancel an original order – cannot be invoked to enlarge the scope of section 10(1) of the Industrial Disputes Act.

Having settled that point, the Court turned to the authorities raised during the arguments. The appellant, through counsel, heavily relied on the Court’s earlier decision in Minerva Mills Ltd. v. Their Workmen (1) [1954] S.C.R. 465. The appellant argued that Justice Mahajan, who delivered the judgment in that case, had expressly observed that the Act did not imply in section 7 that the government could not withdraw a dispute once it had been referred to a tribunal or could not appoint a tribunal for a limited period. The appellant interpreted this observation to mean that the government could withdraw a pending reference from one tribunal and refer it to another, and claimed that the present situation was exactly an example of such a withdrawal. The Court pointed out, however, that the question of an implied power of the appropriate government to cancel its own order under section 10(1) did not arise in the Minerva Mills case. In that earlier case the issue was limited to whether the government could appoint a tribunal for a fixed term, not whether it could rescind a reference it had made. Consequently, the precedent cited by the appellant did not support the proposition that the appropriate government possessed an implied authority to cancel its order under section 10(1), and the Court rejected the appellant’s reliance on that decision.

In the matter before the Court, the appellant argued that the government possessed no authority to create a tribunal for a limited period and that, once industrial disputes were referred to a tribunal, every such dispute had to be resolved by that tribunal alone, even if the tribunal’s appointment was for a limited duration. The first tribunal relevant to the dispute had been constituted on 15 June 1952 and was tasked with hearing a number of industrial disputes. This tribunal was appointed for a term of one year. During the period of its existence the tribunal adjudicated several of the disputes that had been referred to it, but four disputes remained unresolved when its term ended. To address the outstanding matters, a second tribunal was constituted on 27 June 1952. The appellant challenged the legality of the second tribunal, contending that only the first tribunal had the jurisdiction to hear the remaining disputes. The Court rejected this contention and held that the appropriate government was fully empowered to appoint a tribunal for a limited duration. The Court observed that, in the present case, there was no issue of cancelling an order made under section 10(1) of the Industrial Disputes Act, because that order continued to be in force. The only action taken by the government was to issue a fresh order creating a new tribunal to dispose of the references left undecided by the first tribunal. On the basis of these facts, the Court concluded that the government was competent to refer the remaining disputes to the second tribunal. The Court further noted that, strictly speaking, there was no occasion to withdraw any dispute from the first tribunal, since the first tribunal had ceased to exist, leaving no body capable of dealing with the disputes that had already been referred under section 10(1). Consequently, the government’s appointment of a second tribunal was a lawful step to ensure that the pending disputes could be adjudicated.

The Court also examined the relevance of earlier decisions to the present issue. It held that the judgment in Minerva Mills Ltd. (1954) S.C.R. 465 could not be cited to support the proposition that the government possessed the power to cancel a reference order made under section 10(1). Instead, the Court referred to its own earlier decision in Strawboard Manufacturing Co. Ltd. v. Gutta Mill Workers’ Union, which was invoked to argue that the government possessed an implied power to cancel an order made under section 10(1). In the Strawboard case, the government of Uttar Pradesh had referred an industrial dispute to the Labour Commissioner on 18 February 1950 and directed the Commissioner to issue his award no later than 5 April 1950. While the proceedings were pending, two additional issues were referred to the Commissioner. The award was eventually made on 13 April 1950, and the government sought to validate it by issuing a notification on 26 April 1950 that retrospectively extended the time limit for making the award. The Court’s analysis of that decision was used to illustrate the limits of the government’s authority to alter procedural time-frames after an order had been issued under the Act.

In the case under discussion, a notification issued by the Governor of Uttar Pradesh extended the deadline for the Labour Commissioner to make his award from the original date of April 5, 1950 to April 30, 1950. The Court examined this retrospective extension and held that the notification was invalid because it altered the period that had been prescribed in the earlier order. Since the award was finally rendered on April 13, 1950, after the original deadline had already passed, the Court declared the award void. The judgment also referred to observations made by Das, who had noted that, if the State Government considered the addition of two new issues to render the original time frame inadequate, it should have cancelled the earlier notification, issued a fresh reference covering all issues, and fixed a new period for the award. The Court interpreted that passage as reflecting the argument advanced by counsel for the appellant, rather than as the Court’s own view. Consequently, the Court was not persuaded by the appellant’s assumption that the cited passage expressed the Court’s acceptance of that reasoning. The Court concluded that, because the State Government did not cancel the original reference and re-issue a comprehensive one with a new time limit, the later notification could not cure the defect, and the award remained invalid.

The Court also noted that the question of whether the appropriate government possessed the power to cancel an order of reference made under section 10(1) of the Act did not arise for decision in these proceedings. The appellant had also relied on a decision of Bishan Narain J. in The Textile Workers’ Union, Amritsar v. State of Punjab, where the judge had held that such a power could be implied from section 21 of the General Clauses Act, on the ground that it might help preserve industrial peace and harmony. The judgment recorded that Bishan Narain J. was aware that this view could weaken a trade union’s negotiating strength and might encourage individual firms to deal directly with their workmen, but he regarded it as a matter of policy. The present Court, however, stated that it would not address policy considerations. It further observed that, based on the scheme of the Act, the conduct and final determination of an industrial dispute were intended to be left to the industrial tribunal once an order of reference under section 10(1) was made. Accordingly, the Court held that Bishan Narain J. was in error in concluding that the appropriate government had the power to cancel its own order made under section 10(1).

In addressing the issue before it, the Court noted that it would not involve itself with policy considerations, stating that such matters were irrelevant to the present proceedings. Nonetheless, the Court found it useful to observe that the conclusion it had reached left no room for the concerns expressed by the learned judge. The Court reiterated that the purpose of the statute was clearly to entrust the conduct and ultimate determination of an industrial dispute to the industrial tribunal once the appropriate government had issued an order of reference under section 10(1). Accordingly, the Court held that Bishan Narain J. was in error when he concluded that the appropriate government possessed the authority to cancel its own order made under section 10(1) of the Act. The Court further examined the decision of the Kerala High Court in Iyyappen Mills (Private) Ltd., Trichur v. State of Travancore-Cochin (1) and found it of little assistance, because the judges in that case seemed to assume that the first tribunal dealing with the dispute had ceased to exist at the time the dispute was referred by the local government to a second tribunal. If that assumption were correct, the Court observed that the conclusion of those judges would be supported by the Supreme Court’s ruling in Minerva Mills Ltd. (2). Turning to the observations made by Sinha J. in Harendranath Bose v. Second Industrial Tribunal (3), the Court determined that the learned judge erred in attempting to back his view that the appropriate government could cancel its order issued under section 10(1) by relying on passages found in the judgment of this Court in Strawboard Manufacturing Co. Ltd. (4). The Court clarified that those passages were, in fact, part of the arguments presented by the appellant in that case and not obiter dicta of the judge. The Court then considered the last authority, the decision of Rajamannar C.J. and Venkatarama Aiyar J. in South India Estate Labour Relations Organisation v. The State of Madras (5). In that case, the Madras Government had attempted to amend a reference made under section 10 of the Act, and the validity of that amendment was contested. The objection was dismissed on the ground that the government could make an independent reference on matters not covered by the earlier reference, and that the amendment was merely a technical form rather than a substantive addition, thus not warranting interference in the writ proceedings. The Court concluded that the objection was purely formal and without merit. Consequently, the Court identified that the central question before it was whether the appropriate government could cancel or supersede an order of reference originally issued under section 10(1).

In this case the Court noted that the appropriate government may amend a reference originally made under section 10 to the extent that the amendment deals with matters not covered by the original reference, and it observed that the government could have achieved the same result by making a separate independent reference but chose instead to amend the original reference itself.

The Court clarified that this previous decision does not assist the appellant because the present dispute does not concern the power of the government to amend or add to a reference made under section 10(1). The issue before this Court is limited to the specific question of whether an order of reference issued by the appropriate government under section 10(1) may later be cancelled or superseded by that same government. Accordingly the Court affirmed the finding of the learned judges of the Patna High Court that the notification issued by the appellant cancelling the first two notifications was invalid and ultra vires.

The next step was to determine the form in which the final order should be rendered in these appeals. The High Court had purported to issue a writ of certiorari against the State Government, thereby setting aside the impugned notification. However this Court previously held in The State of Madras v. C. P. Sarathy (1) that when the appropriate government makes a reference under section 10(1) it is performing an administrative act, and the requirement to form an opinion on the factual existence of an industrial dispute as a preliminary step does not change the administrative character of the act.

Because the reference is an administrative act, this Court considered it more appropriate to issue a writ of mandamus against the appellant concerning the impugned notification. The Court also observed that the two industrial disputes referred by the appellant in the first two notifications have remained pending before the tribunal for a considerable period. Accordingly it expressed that it would be desirable for the tribunal to take up those references from its file and dispose of them as quickly as possible.

In view of the foregoing the Court concluded that the appeals must fail, ordered the dismissal of the appeals with costs, and recorded that the appeals are dismissed. (1) [1953] S.C.R. 334.